Court issues contempt notices to railways officials in Al-Zahid’s contract case

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A civil court has issued contempt notices to railways minister, its chairman and other officials in a case related to premature termination of a contract awarded to a Qatar-based firm.

The court issued the notices on a petition filed by Al-Zahid Heavy Equipment after the railways official failed to implement the court orders that barred officials from interfering in company’s business.

Authorities of Pakistan Railways are reportedly bent on premature termination of a three-year contract awarded to the Al-Zahid for containers’ handling at Azakhel dry port last year, although the matter is in the court of law.

The move, allegedly on the nod of its minister Azam Swati, can be seen as an attempt to undermine Prime Minister Imran Khan’s efforts to attract foreign direct investment (FDI) in financially-strapped Pakistan, which already recorded 28.9% decline in FDI in fiscal year 2020-21.

The foreign company had secured the three-year contract in 2020 and also cleared the initial payments.

However, the railways authorities issued a new tender for the same project abruptly in July this year with no valid reasons, leaving the foreign firm in agony.

Sources said that the action was taken in haste clearly reflected the ulterior motives as efforts were being made to allegedly award the contract to a favorite company of the railways minister.

Aggrieved at the act, the Qatari company filed a petition with civil court in Lahore which issued restraining orders, barring the authorities from interference in Al-Zahid’s business. The railways later managed to get the stay order quashed.

On August 10, the international firm again moved the court and it suspended the orders issued by a deputy superintended of railways and the minister “to see the majesty of the law”.

The company revealed in its petition that the government entity is receiving the “usufructs and the regular payments” from it as per the award.

On the other hand, railways officials claimed that they had issued the new tender due to the unsatisfactory performance of Al-Zahid Heavy Equipment. But, the foreign firm contends that it was never issued any show-cause notice about the performance since the contract was awarded.

Furthermore, the railways move also violates PPRA rules as new tender cannot be issued until the previous agreement is expired.

This is not the only instance as such malpractice was also reported in Lahore where a contract for handling of containers was illegally awarded to Azam Swati’s alleged frontman.

At the Lahore dry port, a company was handling containers on an ongoing contract basis and it was ousted by giving the contract to another firm named Irfanullah and Company, allegedly owned by Swati’s frontman, without the issuance of any advertisement for the tender.

The move was revised after it got attention from the media and a tender was issued for bidding.

Meanwhile, a spokesman for Pakistan Railways rejected the report that the minister was favoring their own people.

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